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CMA Part 1
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1. External financial reporting decisions
2. Planning, budgeting, and forecasting
3. Performance management
4. Cost management
5. Internal control
6. Technology and analytics
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1.2.1.1 Learning outcomes
Achievable CMA Part 1
1. External financial reporting decisions
1.2. Financial transactions
1.2.1. Accounts receivable
Our CMA Part 1 course is currently in development and is a work-in-progress.

Learning outcomes

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The learning outcome statements related to accounts receivables that you need to accomplish for CMA Part 1 are as follows:

  1. Identify issues related to the valuation of accounts receivable, including timing of recognition and estimation of the allowance for credit losses
  2. Distinguish between receivables sold (factoring) on a with recourse basis and those sold on a without recourse basis, and determine the effect on the balance sheet

Valuation of accounts receivable

  • Timing of recognition: record when revenue is earned and realizable
  • Estimate allowance for credit losses to reflect expected uncollectible amounts
  • Net realizable value = accounts receivable minus allowance for credit losses

Factoring receivables

  • With recourse: seller retains risk of uncollectible accounts
    • Possible liability remains on balance sheet
  • Without recourse: buyer assumes all risk of collection
    • Receivable removed from seller’s balance sheet
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Next  | 1.2.1.2 Initial recognition of accounts receivables
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Learning outcomes

The learning outcome statements related to accounts receivables that you need to accomplish for CMA Part 1 are as follows:

  1. Identify issues related to the valuation of accounts receivable, including timing of recognition and estimation of the allowance for credit losses
  2. Distinguish between receivables sold (factoring) on a with recourse basis and those sold on a without recourse basis, and determine the effect on the balance sheet
Key points

Valuation of accounts receivable

  • Timing of recognition: record when revenue is earned and realizable
  • Estimate allowance for credit losses to reflect expected uncollectible amounts
  • Net realizable value = accounts receivable minus allowance for credit losses

Factoring receivables

  • With recourse: seller retains risk of uncollectible accounts
    • Possible liability remains on balance sheet
  • Without recourse: buyer assumes all risk of collection
    • Receivable removed from seller’s balance sheet

More from Accounts receivable

  • Initial recognition of accounts receivables
  • Factoring of accounts receivables